Hong Kong-based Bitcoin service provider, Bitspark, has announced a new partnership with California-based Bitcoin security provider BitGo and the closure of the company’s first external funding round.
The exchange’s bitcoin reserves will now be protected by multi-signature technology. Bitspark CEO George Harrap, told Bitcoin Magazine the integration has been months in the making.
“We approached BitGo some time before Bitstamp was hacked,” he said. The partnership with the Bitcoin security provider could not come at a more important time for the Asian bitcoin industry.
In February, China-based crypto-currency exchange, Bter, was hacked, and 7,170 bitcoin (worth $1.75 million at the time) were stolen, causing the exchange to almost shut down. The exchange is now beginning to pay back customers with a loan from a Chinese security firm, but the future of the Bter remains unclear. In addition, Hong Kong-based Bitcoin exchange Mycoin disappeared in February with an estimated $8.1 million in customers funds.
The partnership with BitGo makes Bitspark the first Asian exchange to secure their bitcoin reserves with multi-signature technology.
Securing the World’s Bitcoin
“Multi-sig security is such a critical factor for any Bitcoin-related company, and BitGo has been very supportive throughout the process,” said Harrap.
Since the launch of its multi-signature product in late 2013, BitGo has been partnering with large and small Bitcoin startups. The Bitcoin security provider has since partnered with BitStamp, the Bitcoin Foundation, CriptoBanco, Binary Financial and others.
The firm has even introduced the first-ever theft insurance for a Bitcoin company, from a globally A-rated insurance provider.
At the core of BitGo’s offering is multi-signature, a bitcoin transaction that requires more than one private key. These private keys can be distributed among many people, across many geographical locations, making the company’s funds safer. One key is held with BitGo, and two others with the client.
In addition to multi-sig, BitGo also offers 24/7 security monitoring, anti-phishing protection, privacy protection and user authentication.
Not your typical bitcoin investors
“The closure of this funding round ensures that we have the support needed to continue to expand our service offerings,” said Harrap.
According to Bitspark’s press release, the company raised a “6-figure sum” from private investors as part of the company’s seed round. According to Harrap, the investors “aren’t your usual Bitcoin investors and this is probably their first investment in a Bitcoin company.” Instead of Bitcoin, he says, they come from the larger Asian financial technology industry.
The company was originally funded with money from Bitspark’s founders and a $530,000 Hong Kong dollar ($68,387 USD) investment from the startup incubator, Cyberport. In addition to the money, the incubator also offers two years of office space, help with hiring and business development and access to business resources.
New countries and products
Bitspark plans to use the newly raised funds to expand to new markets. The exchange is looking to expand to mainland China, Singapore, Thailand and other Southeast Asian markets. The exchange already operates in Australia, Indonesia, Hong Kong and the Philippines.
A portion of the funds will be used to grow the company’s service and product offering.
In line with the company’s philosophy of “bitcoin in the background,” the exchange will launch their recently beta-tested pre-paid bitcoin cards. These cards will allow people to buy bitcoin at convenience stores and send it to their love ones in other countries – all without having to touch the digital currency.
The cards will soon leave beta in the Philippines and be expanded to stores all around the country. The Bitcoin company also hopes to bring the product to Indonesia later this year.
The Bitcoin exchange will use the funds to launch an advance trading product, which Harrap says they have being getting a lot of requests for. The new trading solution will be a similar experience to other financial products and include charts and technical indicators.
Image via Bitspark.